new technology and data security

Question 1

How can software be used to autmate the accounting process ? P181

Answer 1

• does essential accounting tasks - e.g. sending/ reconciling statemewnts , updating records
• streamline accounting process - little human intervention

Question 2

What are the beneifts of automating the accounting process ? P181

Answer 2

• Improved data integrity - human error reduction
• efficient approval - automatic sending - save time
• internal data visibility - easy access to data - enable identify issues
• quicker customer payments - quicker invoicing

Question 3

What does automation mean for accounting professionals ? P182

Answer 3

• More advisory role - rest of business / clients
• not just number crunching

Question 4

What is artifical intelligence (AI) ? P182

Answer 4

• Computer/ machines simulate human thinking

Question 5

What is machine learning P182

Answer 5

• Application of AI
• codes computer to learn from data
• past event based
• predicts future
• e.g. social media - specific advertising - past viewing history

Question 6

What is an example of AI and machine learning within an accounting system ? P182

Answer 6

• Purchase invoice for inventory - received before
• scanned documenbt - automatically sent to right inventory & correct supplier account

Question 7

What are the main uses for AI and machine learning within an accounting system ? P182

Answer 7

• Coding of data - invoice, receipt, and purchasing coding
• audit of information - large info review highlight unusal
• forcasting future data - e.g. future price change, exchange rates , customer buying trend
• analysing complex data

Question 8

What are the disadvantages of AI and machine learning for companies ? P182

Answer 8

• Expensive - set up and updates - large organisation exempt
• counter: off shelf cloud accounting system - smaller organisations
• reluctance- trusts system
• staff redundancies
• counter - train staff analyse data from system

Question 9

What is a blockchain ? P183

Answer 9

• Digital ledger of transactions
• shared - network of computers - in block chain
• Duplicated info - large number of users shared
• means - transactions - not altered deleted, destroyed

Question 10

What are the steps for a blockchain working in practice ? P183

Answer 10

• Transaction raised
• blocked created - represents transaction
• block distributed - every computer
• every computer validates transaction
• authenticared - block added to chain

Question 11

How can a block chain protect against hacking features ? P183

Answer 11

• Transaction shared - user in blockchain
• all transactions details - all user recorded
• ledger of all users updated - all agreed consistent (prevents single computer addition)
• new block linked to old block - cryptographic hash - authorised access

Question 12

How can blockchains be useful in the accounting system ? P184

Answer 12

• certainty - ownership of asset
• ledger maintenance - accurate information
• does record keeping - costs reduction & efficency - (concentrate on other tasks)

Question 13

What are the benefits of electronically filing documents, rather than keeping paper documentation ? 7 points P184

Answer 13

• authorised user - instant access - remote access
• physical space free up
• reduction of copies- access to same
• organisation
• version control - full document history available
• automatically backed up - no natural disasters - fire / floods
• improved productivity - more access

Question 14

What are the disadvantages of electronically filing documents ? P184

Answer 14

• Software used - needs updating
• significant initial set up costs
• risk of data breach

Question 15

What are the main ways for a business to sign a document electronically ? P184

Answer 15

• simple electronic signatures - scanning physical / tick box
• advanced electronic signatures - electronic identifier - validate signature on electronic document
• qualified electronic signature - electronic signature witness - third party trust service provider

Question 16

What is data analytics ? P185

Answer 16

• Collecting, organising, analysing - large data amounts
• analyse - identify data patterns

Question 17

What are the four types of data analytics ? p185

Answer 17

• Descriptive
• Diagnostic
• Predictive
• Prescriptive

Question 18

What is descriptive data analytics ? P185

Answer 18

• Reports on past performance

Question 19

What is diagnostic data analytics ? P185

Answer 19

• Analyses causes of things

Question 20

What is predictive data analytics ? P185

Answer 20

• Make predictions - large volume of data
• not 100 % accurate

Question 21

What is prescriptive data analytics ? P185

Answer 21

• Action to take
• machine learning
• algorithms and rules
• problem solving recommendations

Question 22

What are the advantages of data analytics ? P186

Answer 22

• quicker decision making - large data processing
• reduce risks of fraud - anomaly identification
• priotising - profitable activities . trend identification

Question 23

What is a disadvantage of data analytics ? P186

Answer 23

• expensive
• predictive and prescriptive data - algorithm written

Question 24

What is outsourcing ? P186

Answer 24

• Third party - tasks and services / operations
• previously in house

Question 25

What are the advantages of outsourcing ? P187

Answer 25

* Potential cost savings - payroll costs * staff time freed up * outsourcing business expertise benefit * no legislation/ regulation compilance concern - related to outsourced tasks

Question 26

What are the disadvantages of outsourcing ? 8 points P187

Answer 26

* costs structure change - capital costs decreased, expenses increased * core operations outsourced - expertise lost * quality issues * difficulty moving back in house * data security - outsourcing to see confidential info * staff morale affected - redundancies * outsourcing company costs increase = reliance * delivery- outsourced item - issues

Question 27

What is offshoring ? P187

Answer 27

* Relocating operations - another country * e.g. developed countries - less developed countries - reduction in costs expectation

Question 28

What is the main advantage and disadvantage of offshoring ? P187

Answer 28

* advantage - Higher visibility - business in overseas country * disadvantage - language and cultural barrier

Question 29

What is cloud computing ? P188

Answer 29

* delivers computer resources - on demand - the internet * remote server access - update files * e.g. icloud - user photo files, notes, passwords

Question 30

What is cloud accounting ? P188

Answer 30

* Accounting system - internet access - remote & secure servers * system provider owned * user subscription - accounting records in cloud

Question 31

What are features of cloud accounting ? P188 7 points

Answer 31

* Remote access * remote data storage - autmatic data adding * shared access - no emailing info/ usb - info viewed same time * automation capabilities - automatically posting bank transactions * app (phone access) / plug ins & add ins (customise reports) * stakeholder interaction * real time data - up to date, checked any time

Question 32

What are the specific benefits of cloud accounting ? P189

Answer 32

* Lower IT costs - no own server - reduce IT expertise - no back up process * improved sustainability - * better security - security included - no back up needed

Question 33

What are the disadvantages of cloud accounting ? P189

Answer 33

* Internet access reliance - no/poor disruption - busienss operations affected * data security - increased unauthorised access risk * software requirements - all stakeholders - same clouding software * difficulty switching

Question 34

Where do data regulation principles come from ? P190

Answer 34

* Data Protection act 2018 * EU General Data Protection Regulagtions requirements

Question 35

What are the 7 data protection regulation principles ? P190

Answer 35

1. Lawfulness, fairness, and transparency - open & honest reason data processing 2. pripose limitation - used only for purpose 3. data minimisation - only necessary for purpose 4. accuracy - kept up to date 5. storage limitation - no longer than necessary - length justified 6. integrity and confidentiality - kept secure 7. accountability - audit trail - regulation compilance

Question 36

What is meant by breaches in data protection ? P191

Answer 36

* personal data business held - shared * unauthorised persons - misuse info

Question 37

How are organisations who suffer a data breach dealt with ? P191

Answer 37

Information commissioner's office - regulate and enforce GDPR >€20 million / 4 % organisation annual global turn over - UK business - EU resident data >£17.5 million / 4% annual global turnover - uk business- uk resident

Question 38

What must an organisation do if they discover a data regulation breach ? P191

Answer 38

* report relevant supervisory authority - within 72 hours * inform individuals - high risks/ adversly affect rights and freedoms - undue delay

Question 39

What must an organisation have to ascertain if it needs to notify an authority or individual of a data breach ? P191

Answer 39

* Robust data breach detection , investigation & internal reporting procedures

Question 40

Aside from reporting it, what must organisations do with data breaches ? P191

Answer 40

* Keep record * regardless - required notification relevant supervisory authoriity/ individual or both

Question 41

What type of threats must an organisation protect its data from, and how is this done ? P191

Answer 41

* Physical threats * unauthorised access * implement certain controls

Question 42

What controls are implemented for a business to protect data from physical threats and unauthorised accesss ? P192

Answer 42

* Accounting system access levels * security controls * integrity controls

Question 43

How can an accounting system access level protect against unauthorised access ? P192

Answer 43

* password - authorised employees only * electronic access logs - record of who accessed

Question 44

How can security controls protect help protect information systems ? P192

Answer 44

* Firewalls - barriers * between internal netwrok and public internet * incoming/ outgoing taffic monitoriing * dangerous traffic out

Question 45

How can integrity controls help maintain information systems ? P192

Answer 45

* data integrity = accuracy and completeness of data * control - design to - Manage and maintain integrity of data: * input controls * processing controls * output cntrols

Question 46

How can input controls help with integrity control ? P192 | Maintaining information systems

Answer 46

* providing complete & authorised transaction assurance - before processing * documents sequence checking - reconciling batch totals

Question 47

How can processing controls help with integrity controls ? P192 | Maintaining infromation systems

Answer 47

* ensure data processed properly * data match - two or more items - before system processing * invoice - goods received note * more than one user- not update record- same time

Question 48

How would output controls help with integrity controls ? P192

Answer 48

* ensure - output data integral: * reconciling data - receivables control account - receivables ledger * review - sign off user of system - BACs payroll payment - payroll management

Question 49

What are the three cyber secuirty measures businesses must use to prevent risks from cyberattacks ? P193

Answer 49

* Firewalls * Antivirus software - protection scanning, detecting , deleting virus * Data encryption - another form/ code - decryption key reading - data confidentiality purpose